Rajandran R Telecom Engineer turned Full-time Derivative Trader. Mostly Trading Nifty, Banknifty, USDINR and High Liquid Stock Derivatives. Trading the Markets Since 2006 onwards. Using Market Profile and Orderflow for more than a decade. Designed and published 100+ open source trading systems on various trading tools. Strongly believe that market understanding and robust trading frameworks are the key to the trading success. Writing about Markets, Trading System Design, Market Sentiment, Trading Softwares & Trading Nuances since 2007 onwards. Author of Marketcalls.in and Co-Creator of Algomojo (Algorithmic Trading Platform for DIY Traders)

Gold – Multitimeframe ADX Analysis

1 min read

Gold Monthly timeframe

Gold monthly charts are still trading in a larger consolidated zone of
1050-1350 for the last 5 years and currently trading very close to the upper band. Monthly ADX is maintaining below 20 since the year 2017 that shows the dullness in the trend at the broader level.

Last 5 months still the ADX value is in a declining mode. However, the price had broken 3 months high of 1324 levels. Currently Gold is trading around 1328 levels. Any shoot up in monthly ADX levels could possibly suggest a long term trend reversal.

Gold Monthly – Dollar Denominated

Gold Weekly Timeframe

Gold on the weekly timeframe broken above multi week high and at the same time there is a bullish hook reversal observed in the weekly timeframe. Which possibly indicates a medium term trend reversal on the upperside. Next observable swing high is near 1246 levels.

Gold Weekly Charts – Dollar Denominated

Gold Daily timeframe

Strong ADX Divergence Breakout is observed on the daily timeframe and daily charts are showing significant strength on the ADX charts where ADX values are increasing for the last four trading sessions consecutively. However still ADX levels are still below 20 levels

Gold Daily Charts – Dollar Denominated

Overall via multi timeframe analysis one can understand that both short term and medium term trend turned bullish which is the initial key for the beginning of the sustained long term trend.

What to read from ADX?

If ADX is between 0 and 25 then the particular trading instrument is in a trading range. It is likely just chopping around sideways. Avoid these weak, pathetic stocks!

Once ADX gets above 25 then you will begin to see the beginning of a trend. Big moves (up or down) tend to happen when ADX shoots above 25

When the ADX indicator gets above 30 or 35 then higher the number bigger the strong trend!

If ADX reaches greater than 50 then one should see trends coming to an end and trading ranges start developing again.

Based on the above multi-timeframe analysis on ADX one could conclude that both Daily & Weekly timeframe is developing a trend and monthly timeframe is consolidating. However, the rise in ADX on monthly timeframe is the key for a sustained and accelerating uptrend.

Monthly Breaking 1346 levels with accelerating ADX value on the monthly timeframe is the key for long term sustained uptrend

Rajandran R Telecom Engineer turned Full-time Derivative Trader. Mostly Trading Nifty, Banknifty, USDINR and High Liquid Stock Derivatives. Trading the Markets Since 2006 onwards. Using Market Profile and Orderflow for more than a decade. Designed and published 100+ open source trading systems on various trading tools. Strongly believe that market understanding and robust trading frameworks are the key to the trading success. Writing about Markets, Trading System Design, Market Sentiment, Trading Softwares & Trading Nuances since 2007 onwards. Author of Marketcalls.in and Co-Creator of Algomojo (Algorithmic Trading Platform for DIY Traders)

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